WTI rises to near $73.00 due to a potential policy support to revive economic growth

• WTI prices continue to rise as governments worldwide are expected to increase policy support to revive economic growth.

• China's state planner, the NDRC, outlined plans to significantly boost funding through ultra-long treasury bonds to support "two new" programs.

• EIA Crude Oil Stocks decreased by 1.178 million barrels, marking the sixth consecutive drop in crude Oil stocks.

West Texas Intermediate (WTI) Oil price continues its winning streak for the sixth consecutive day, trading around $73.00 per barrel during the Asian session on Friday. WTI price reached two and a half-month high at $73.39 on Thursday. Crude Oil prices were buoyed by optimism that governments worldwide would ramp up policy support to revive economic growth, potentially boosting fuel demand.

However, factory activity in Asia, Europe, and the US ended 2024 on a weak note, as expectations for the new year dimmed due to growing trade risks associated with the incoming Donald Trump presidency and China's fragile economic recovery.

The National Development and Reform Commission (NDRC), China's state planner, expressed confidence in achieving continued economic recovery in 2025. In a statement on Friday, it highlighted plans to significantly increase funding from ultra-long treasury bonds to support "two new" programs, with expectations for steady consumption growth throughout the year.

Additionally, a Financial Times report noted that the People's Bank of China (PBoC) anticipates an interest rate cut this year at an appropriate time. Traders are closely monitoring the potential recovery in China’s economy and its effect on Oil demand. In a New Year’s address on Tuesday, President Xi Jinping reaffirmed his commitment to prioritizing economic growth in the world's largest oil-importing nation, promising more proactive policies to bolster China's economy in 2025.

Analysts at Capital Economics said in a note, referencing the purchasing managers' indexes data released on Thursday, "December PMIs for Asia were a mixed bag, but we continue to expect manufacturing activity and GDP growth in the region to remain subdued in the near term."

Meanwhile, the Energy Information Administration (EIA) reported a decline in crude Oil stocks for the week ending December 27. EIA Crude Oil Stocks Change reported a 1.178 million-barrel decline, a smaller decrease than the market’s expectation of a 2.75 million-barrel drop. This marked the sixth consecutive drop in crude oil stocks. Additionally, crude stocks at the Cushing, Oklahoma, delivery hub decreased by 0.142 million barrels.